Qualcomm results, outlook beat Street; shares soar

NEW YORK (Reuters) - Qualcomm Inc reported higher-than-expected quarterly earnings and set a full-year revenue target that blew past Wall Street expectations as strong smartphone sales boosted demand for its wireless chips.

Qualcomm shares rose 8 percent after the company, which analysts expect to supply chips for Apple Inc iPhone next year, said the popularity of advanced phones would push up earnings and revenue in fiscal 2011.

RBC analyst Mark Sue said investors, who had already pushed Qualcomm shares up almost 20 percent since August, were surprised by the strong report and guidance.

“The larger positive is that Qualcomm’s guidance is also much better than what most people had expected, which means, I think, that many things are aligning for Qualcomm as it relates to smartphone growth, market share gains and a strong design win cycles,” Sue said.

Qualcomm posted a profit for its fiscal fourth quarter ended September 26 of $865 million, or 53 cents per share, up from $803 million, or 48 cents per share, in the year-ago quarter.

Excluding items such as its investment arm, Qualcomm earned 68 cents per share, above analysts’ average forecast for 59 cents, according to Thomson Reuters I/B/E/S.

Revenue rose 10 percent to $2.95 billion from $2.69 billion in the year-ago quarter, ahead of analysts’ average estimate of $2.85 billion according to Thomson Reuters I/B/E/S.

Qualcomm said its fiscal first-quarter earnings per share would rise to a range of 70 cents to 74 cents on a non-GAAP basis from 62 cents in the first quarter of 2010.

It also forecast first-quarter revenue of $3.05 billion to $3.35 billion, beating analysts’ expectations for $2.99 billion.

It said full-year 2011 revenue would rise to a range of $12.4 billion to $13 billion from $10.99 billion in 2010.

The San Diego-based company said on Wednesday it expects to exit its Flo TV mobile television service and forecast restructuring charges of $125 million to $175 million in fiscal 2011 related to the exit. It said it is still looking for strategic options for the business.

Qualcomm shares rose to $49.51 in extended trading after closing at $45.69 on Nasdaq. The stock had already risen almost 20 percent since late August.

Reporting by Sinead Carew; Editing by Richard Chang